United States District Court, D. Nevada
WELLS FARGO BANK, N.A. and FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiffs,
PINE BARRENS STREET TRUST; RMI MANAGEMENT, LLC dba RED ROCK FINANCIAL SERVICES; and VENEZIA COMMUNITY ASSOCIATION, Defendants. VENEZIA COMMUNITY ASSOCIATION, Counter-Claimant,
RMI MANAGEMENT, LLC dba RED ROCK FINANCIAL SERVICES, Counter-Defendant.
RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE.
the Court are two pending motions: Defendant Pine Barrens
Street Trust's Motion to Dismiss, ECF No. 42, and
Defendant RMI Management, LLC dba Red Rock Financial
Services's Motion to Dismiss, ECF No. 43.
matter arises from a nonjudicial foreclosure sale conducted
by a homeowners' association under Nevada Revised
Statutes (“NRS”) Chapter 116 in 2012. ECF No. 1.
Wells Fargo Bank, N.A. and Federal National Mortgage
Association (“Fannie Mae”) sued Defendants Pine
Barrens Street Trust, RMI Management, LLC dba Red Rock
Financial Services (“Red Rock”), and Venezia
Community Association (“HOA”) on May 30, 2017.
ECF No. 1. In the complaint, Plaintiffs allege seven claims:
(1) Declaratory Relief against Pine Barrens under the Federal
Foreclosure Bar, 12 U.S.C. § 4617(j)(3); (2) Quiet Title
against Pine Barrens under the Federal Foreclosure Bar; (3)
Declaratory Relief by Wells Fargo against all Defendants
under the Fifth and Fourteenth Amendments to the federal
constitution; (4) Quiet Title by Wells Fargo against Pine
Barrens under the Fifth and Fourteenth Amendments to the
federal constitution; (5) Wrongful Foreclosure by Wells Fargo
against all Defendants; (6) Violations of Nevada Revised
Statutes (“NRS”) Chapter 116 by Wells Fargo
against Red Rock and HOA; and (7) Unjust Enrichment by Wells
Fargo against Pine Barrens. ECF No. 1.
Rock moved to dismiss claims five and six on July 24, 2017.
ECF No. 12. Plaintiffs filed a non-opposition to the motion.
ECF No. 19. Pine Barrens moved to dismiss the entire
complaint on August 14, 2017. ECF No. 17. Wells Fargo opposed
the motion and Fannie Mae filed a countermotion for summary
judgment. ECF Nos. 24, 25. Pine Barrens filed a reply to the
opposition and an opposition to Fannie Mae's counter
motion. ECF Nos. 27, 33. Fannie Mae replied. ECF No. 34.
answered the complaint and asserted a cross-claim against Red
Rock on September 1, 2017. ECF No. 21. Red Rock answered the
cross-claim on September 21, 2017. ECF No. 28.
March 23, 2018, the Court denied the pending motions to
dismiss and the pending countermotion for summary judgment
without prejudice to refiling after a decision issued on a
pending certified question before the Nevada Supreme Court.
ECF No. 40. The Nevada Supreme Court issued the decision in
Barrens now moves to dismiss the complaint in its entirety.
ECF No. 42. Plaintiffs opposed the motion, and Pine Barren
replied. ECF Nos. 57, 58.
Rock also re-moves to dismiss claims five and six. ECF No.
43. The HOA joined to Red Rock's motion but Pine Barrens
did not. ECF No. 46; see also docket generally.
Plaintiffs did not oppose the motion. See docket
generally; see also ECF No. 50 (allowing an
opposition to be filed until October 16, 2018).
Complaint alleges the following:
matter concerns a property located at 7245 Pine Barrens
Street, Las Vegas, NV 89148. The property sits in a community
subject to certain Conditions, Covenants, and Restrictions
(“CC&Rs”) for the HOA. The CC&Rs include
a mortgage savings clause, which states that any lien on the
property is not superior to a deed of trust recorded against
the property. Because the property sits in a community
governed by the HOA, the community members must timely pay
homeowners' association dues.
Subhash V. Chandran secured a loan for $133, 588.00 from
World Savings Bank, FSB on January 14, 2004. To do so,
Chandran executed a promissory note and a corresponding deed
of trust in favor of World Savings Bank. The deed of trust
was recorded on January 21, 2004, identifying Chandran as the
borrower and World Savings Bank as the beneficiary of record
under the deed of trust. Fannie Mae purchased ownership of
the loan (the promissory note and the deed of trust) in July
Corporation acquired World Savings Bank in October 2006. Two
years later, Wells Fargo acquired Wachovia Corporation. Wells
Fargo remained the servicer of the loan and the record
beneficiary of the deed of trust for Fannie Mae.
September 2008, the Federal Housing Financial Agency
(“Agency”), an independent federal agency with
regulatory and oversight authority over Fannie Mae, placed
Fannie Mae into a conservatorship under the Housing and
Economic Recovery Act, 12 US.C. § 4511 et seq.
Under the conservatorship, the Agency succeeds to “all
rights, titles, powers, and privileges of [Fannie
Mae.]” 12 U.S.C. § 4617(b)(2)(A).
Fargo continued in its role as the servicer for the loan on
behalf of Fannie Mae. It also continued to be the record
beneficiary of the deed of trust. Wells Fargo was acting in
the same capacities through October 30, 2012.
relationship between Fannie Mae and its servicers, including
Wells Fargo, are governed by Fannie Mae's Single-Family
Servicing Guide (“the Guide”). The Guide provides
that servicers may act as record beneficiaries for the deeds
of trust owned by Fannie Mae. It also requires that servicers
assign the deeds of trust to Fannie Mae upon Fannie Mae's
demand. The Guide states:
The servicer ordinarily appears in the land records as the
mortgagee to facilitate performance of the servicer's
contractual responsibilities, including (but not limited to)
the receipt of legal notices that may impact Fannie Mae's
lien, such as notices of foreclosure, tax, and other liens.
However, Fannie Mae may take any and all action with respect
to the mortgage loan it deems necessary to protect its
… ownership of the mortgage loan, including
recordation of a mortgage assignment, or its legal
equivalent, from the servicer to Fannie Mae or its designee.
In the event that Fannie Mae determines it necessary to
record such an instrument, the servicer must assist Fannie
Mae by  preparing and ...